According to the EY MENA IPO Eye Q2 2024 report, the Middle East and North Africa (MENA) area continues to see a spike in IPOs during the second quarter of 2024, with 14 IPOs raising USD 2.64 billion in proceeds.
With revenues increasing by 45.3% over the same quarter last year, this is an increase from the 13 listings in Q2 2023.
In Q2 2024, the Kingdom of Saudi Arabia (KSA) accounted for 11 of the 14 listings and raised USD 1.6 billion, leading the region’s initial public offering (IPO) activity. With USD 764 million, Dr. Soliman Abdul Kader Fakeeh Hospital Co. made the most money. Saudi Manpower Solutions Company (SMASCO) came in second with USD 240 million, while Rasan Information Technology Company came in third with USD 224 million.
With Alef Education Consultancy LLC raising USD 515 million on the Abu Dhabi Securities Exchange (ADX) and Spinneys 1961 Holding Plc raising USD 375 million on the Dubai Financial Market (DFM), the United Arab Emirates (UAE) also made a substantial contribution to the region’s IPO market. 33.8% of the total funds for the quarter came from these two IPOs.
According to Brad Watson, EY MENA Strategy and Transactions Leader, “Q2 2024 was a stronger quarter with a total of 14 IPOs raising USD 2.6 billion, even if the MENA stock markets continue to confront challenges.”
Five of the listed firms were in the Tadawul main market, and eleven of the companies were located in the KSA region. Dr. Soliman Abdul Kader Fakeeh Hospital Co. raised the most money (USD 764 million).
“A robust pipeline for H2 2024 has kept the IPO activity in the region lively,” Watson continued, while stating, “Increased liquidity is fuelled by higher oil prices, economic recovery, and positive market optimism.”
When comparing the share price as of June 30, 2024, to their IPO price, eight of the 14 MENA IPOs issued in Q2 2024 had exhibited a positive return; Miahona Company had the largest gain during this time, coming in at 90.4%.
Additionally, Beyout Investment Group (BIG) Holding Co. raised USD 147 million on the Kuwait Stock Exchange (KSE), marking Kuwait’s first listing since Q4 2019.
Sixteen private companies and seven funds from different industries plan to list on the MENA exchanges, indicating that the IPO market will be very active for the remainder of 2024. Fourteen companies, including Riyad Capital, United International Holding, and Arabian Mills for Food Products, are based in the Kingdom of Saudi Arabia and are planning to list. Along with Go Bus in Egypt, another company in the United Arab Emirates has been approved for listing.
Gregory Hughes, EY MENA IPO Leader, said, “The KSA and UAE markets continued to be the leaders of the MENA IPO market.”
However, Kuwait Boursa has been happy to see its first listing since 2019. As the MENA area continues to witness listings from a range of sectors, including health care, education, consumer products, and professional services, there is a persistent focus on economic diversification away from oil and gas.
Analysts will be watching with interest the ensuing impact on regional markets and initial public offering (IPO) activity as things move into an era of dropping interest rates and political changes throughout the world.
Global IPO activity decreased in comparison to Q2 2023, with proceeds falling by 31% from USD 40.4 billion to $27.8 billion and the number of IPOs falling by 15% from 317 to 271.
The EMEIA region did, however, see a noteworthy resurgence, with interest rates declining, stock markets surging to record highs, inflation getting close to “normal” levels, and volatility staying low. With 45% of deal volume and 46% of value, the area regained its top spot in the worldwide IPO market share for the first time in 16 years, thanks to this upsurge.